The Chery J1 is the cheapest new car in Australia since 1993, when the Polish-built FSM Niki sold for $6990 plus on-road and dealer costs.

However, it can't be purchased in Victoria because of the lack of stability control. It is illegal in that state to sell cars without the potentially life-saving technology.

The Chinese-made Chery J1 hatchback has just been reduced by $2000 to $9990 - making it Australia's cheapest new car in about 20 years.

While various car makers in the last 20 years have sold cars close to $10,000, none have fallen below the barrier, typically settling at $10,990 or $11,990.

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The push to price the largely unknown Chery below $10,000 is sure to boost sales.

A spokesman for Chery importer Ateco Automotive, Daniel Cotterill, told Drive that the new pricing for the J1 is “not a special offer”.

“Chery so far hasn't flown the way we, or Chery, would have liked it to. But there’s great determination both with Chery and with Ateco Automotive to make sure that Chery does gain a foothold it needs in this country, and [this new price] is part of the strategy to get it done,” Cotterill says.

“Since we’ve been in the Chinese car business we’ve sought to use currency fluctuations and exchange rates to their best effect to make our products as competitive as they can be. And as the currency has worked for us, we’ve passed that on to the customer.

“We’re casting around looking for a way to make [the Chery business] work in Australia,” he says.

“If an offer like this breathes life into the franchise then of course people will be more willing to sell the product. We’ve had a very loyal and very tough crew of Chery dealers who have stuck with us through the launch phase.”

Cotterill says increased competition from cars like the new Thai-built Mitsubishi Mirage, which is currently being advertised at $12,990 drive-away, has led to Chery taking this aggressive tack.

“This is not a special offer. There’s no fine print. That’s the price, and that’s what you get,” Cotterill says.

However, the Chery is lacking key safety features, including potentially life-saving side airbags and stability control, which can help control a skid and has been credited with reducing single-vehicle crashes by up to 40 per cent.

The J1 undercuts similarly-sized city hatchbacks by about $5000, and it is $2000 cheaper than the rival Suzuki Alto, which comes with four more airbags and stability control.

Chery's J1 hatchback scored just 3 stars in its ANCAP crash test.

The Chery J1 scored just three stars in its ANCAP crash test in 2011, well below the standards of cars priced around the $14,000 mark. ANCAP states that it "does not recommend purchasing vehicles with less than 4 stars".

The chairman of the Australasian New Car Assessment Program - an independent crash test authority - warned people about being tempted by the price of the J1.

"Our advice is that we don't encourage anyone into a three-star [ANCAP safety-rated] car," said Lauchlan McIntosh. "There are plenty of [affordable] five-star cars about ... you can get a lot of good second-hand cars, probably a [Toyota] Yaris or Mazda or something in that space."

Buyers looking for a segment-leading Toyota Yaris in decent condition for less than $10,000 would have to look at a 2006 model or earlier.

Chery has also cut the price of the J3 small hatchback to a new low – it’s priced at $12,990 drive-away. That car will finally receive stability control as standard from the second quarter of 2013. That will allow Chery to sell the J3 in Victoria.

Cotterill says it is not yet clear whether the J1 city car will be offered with stability control.

Despite the huge popularity of SUVs in Australia over the past 12 months, Chery's own soft-roader, the J11, has struggled despite an aggressive pricing strategy. It remains priced at $17,990 drive-away for the manual and $19,990 drive-away for the auto.

“That's as good as we can do with that price at the moment,” says Cotterill.

The move from Chery to lower the price of its brand new city car to below $10,000 is also likely to impact the lower end of the used car market.

207 comments so far

You'd have to doing it mighty tough to consider buying a Chery of any stripe.

Commenter

Hedge Hog

Location

Date and time

January 08, 2013, 11:26AM

Yeah!.. I'll stay away from one of these when I see it on the road...

Commenter

Andreu

Location

Sydney

Date and time

January 08, 2013, 11:56AM

I know someone who'd buy one............an old boss of mine insisted on buying the cheapest nastiest vehicles he could fine and then had the gall to think we were privileged to drive them. (think Citroen Berlingo - no abs, 1 airbag only)

meanwhile he swanned around in his Audi S5

needless to say my tenure was short

Commenter

human capital

Location

in a vacuum

Date and time

January 08, 2013, 12:27PM

They may struggle in an effluent country like Oz, however perspective is a funny thing in the developing world. While recently in Yangon, Myanmar where the government has introduced a scheme to remove cars that over 40 years old from the road and where I could see the road through holes in the floor of an old Toyota Corona taxi with no interior lining, I targeted the Chery J1 taxis to flag down for a ride. They were a lot more comfortable and felt much safer with working door handles etc.

Commenter

George Oh-Well

Location

A taxi cab

Date and time

January 08, 2013, 12:51PM

@George - Effluent : an outflowing of water or gas from a natural body of water, or from a human-made structure.

Which part of Australia are you talking about exactly?

Commenter

Muggins

Location

Melbourne

Date and time

January 08, 2013, 12:59PM

At least it has a couple of handles on the roof so you can pick it up and carry it to the servo when a wheel falls off or something.

Hedgehog and a andreu the rate Reinhart and Barnett are flogging our iron ore mines to the Chinese in ten years your only new car choice will be Chinese and if you leave Sydney and travel to Perth you will find all our traffic signs in Chinese too.

Commenter

Sabastian

Location

Doubleview

Date and time

January 08, 2013, 1:31PM

... Competitors are just annoyed that they can't sell their 30K+ cars for 10K. Safety? Really? Try riding a motorcycle then.

Commenter

Griffo

Location

Date and time

January 08, 2013, 1:40PM

Oh dear, I thought George was making a joke, I hope he was making a joke.